Identifies common practices to be aware of when selling in this market, e.g., whether all sales material need to be in the local language.
Price, payment conditions, value, and quality are critical factors for success in Romania’s business and consumer markets. European competitors have a tariff-free status within the EU. In addition to a competitive price, American firms need to demonstrate a clear qualitative value proposition. Public-procurement- wise, the main (sometimes unique) winning criterion is the price (N.B - all tender documentations are publicized in Romanian; however, many Romanians will understand English).
The Romanian site where the public tenders are advertised is https://www.e-licitatie.ro/ .
View additional information regarding public procurement, tenders and contracts within the European Union.
Trade Promotion & Advertising
According to the European Audiovisual Observatory, there are more than 40 on-demand audiovisual services including main broadcasters’ catchup TV services. The main distribution companies - RCS/RDS, Telekom Romania, and Orange - also offer on-demand services of their own alongside third-party services such as HBO on Demand. Voyo is the SVOD service of Pro TV (part of the Central European Media Enterprises). Netflix is also available in Romania.
The main players are internationally known advertising agencies, multinational media agencies and global brand advertisers. The largest advertising investments come from companies working in telephone services, retail, and fast-moving consumer goods.
The businesses of the main media agencies have increased in 2021, proving that after the shock in 2020, the advertising consumption has recovered to normal levels, despite the advertising inflation on the television market.
In 2021, the 14 largest media agencies in Romania had a total turnover of USD 580 million, 23.6% higher than in 2020. Resource: 2021 list of TV stations.
- National Audiovisual Council
- The International Advertising Association
- The Romanian Advertising Association (UAPR)
- IAB Romania – member of IAB Europe
- Media Fact Book
Romania’s GDP growth is forecasted to reach 2.6% (yoy) in 2022, after 5.9% in 2021. 2023 will bring an increase to 3.6% year over year. Consumer Spending in Romania increased to USD 9.5 billion in the first quarter of 2022 from USD 9.3 billion in the fourth quarter of 2021. Much of the price increases of consumer goods and energy in Romania during 2022 have been attributed to Russia’s invasion of Ukraine.
The annual inflation rate in the EU continued to increase as of April 2022 up to 8.1%, from 7.8% in March. The EU Member States with the highest rates were Estonia (19.1%), Lithuania (16.6%), Czech Rep. (13.2%, Latvia (13.1%), Bulgaria (12.1%) and Romania (11.7%) Compared to March 2022, the annual rate of inflation has risen in 22 MS, including Romania, from 9.6% to 11.7%. In April 2021, the inflation annual rate was 2% and in Romania it was 2.7%.
Pricing structures in Romania are like most other countries: they are increased by wholesale and retail markups as well as by taxes including VAT. Romanian VAT rates are 19 % standard and either 5 or 9 % reduced.
Exporters can realize greater sales success by quoting prices in local currency and offering credit terms instead of Letters of Credit or cash in advance. Numerous banks in the United States and Romania offer appropriate trade finance tools to manage both currency and payment risk. The U.S. Export-Import Bank and private providers offer credit insurance for Romanian buyers, as well.
Sales Service/Customer Support
After-sales customer service and support are still developing among Romanian businesses. Therefore, Romanian consumers are increasingly sensitive to the quality of after-sales services in their buying decisions. American firms generally hold an advantage in this area, but local partners may prove a weak link that damages brand perception. U.S. companies should be prepared to work closely with and train and certify local partners (distributors, value-added resellers) to help them develop their service and support capabilities.
Conscious of the discrepancies among EU Member States in product labeling, language use, legal guarantee, and liability, the EU has launched several initiatives aimed at harmonizing national legislation. Suppliers within and outside the EU should be aware of existing and upcoming legislation affecting sales, service, and customer support.
Under the 1985 Directive on Liability of Defective Products, amended in 1999, the producer is liable for damage caused by a defect in his product. The victim must prove the existence of the defect and a causal link between defect and injury (bodily as well as material). A reduction in liability of the manufacturer is granted in cases of negligence on the part of the victim.
The 1992 General Product Safety Directive introduces a general safety requirement at the EU level to ensure that manufacturers only place safe products on the market. It was revised in 2001 to include the following: an obligation for the producer and distributor to notify the Commission in case of a problem with a given product, provisions for its recall, the creation of a European Product Safety Network, and a ban on exports of products to third countries that are not deemed safe in the EU. The legislation is still undergoing review.
Legal Warranties and After-sales Service
Under the 1999 Directive on the Sale of Consumer Goods and Associated Guarantees, professional sellers are required to provide a minimum two-year warranty on all consumer goods sold to consumers (natural persons acting for purposes outside their trade, businesses, or professions), as defined by the Directive. The remedies available to consumers in case of non-compliance are:
- Repair of the good(s)
- Replacement of the good(s)
- A price reduction
- Rescission of the sales contract
Principal Business Associations
Limitations on Selling U.S. Products and Services
Generally, there are no absolute restrictions regarding the sale of U.S. products and/or services in Romania. However, applicable legislation does provide specific requirements for the manufacturing, import, trade, sale, and supply of certain products and services in the country. Foreign entities and individuals may need to obtain certain authorizations, licenses, permits, endorsements, and/or approvals and to set up local/EU subsidiaries. Some noteworthy examples are:
- Pharmaceutical products may only be imported and sold in Romania if they are authorized for marketing in the country and their price is approved by the Romanian Ministry of Health
- Medical devices can only be placed on the Romanian market if they bear the CE marking
- Food supplements must be notified and approved by the local regulatory authorities in order to be traded in Romania
- Imports and sales of firearms, ammunition, and explosives are subject to specific licenses and authorizations
- Transportation, telecommunications, and audiovisual services are subject to licensing in Romania
- Trade in nuclear products has a specific legal regime and requires mandatory authorizations
- The trade, supply, distribution, transmission, and generation of energy generally require specific authorizations and a physical presence in Romania (subsidiary, branch, office, etc.)
- For financial services, capital market activities, payments, and e-money institutions, a U.S. entity must obtain specific authorizations and have a subsidiary located in Romania or another EU member state.